SHAFAQNA- David Cameron insisted on Monday that his planned EU referendum was not scaring off inward investment to Britain, and denounced Labour for saying it would stay in an unreformed 28-member bloc “come what may”.

Speaking at the annual conference of the CBI employers’ group, the prime minister rejected suggestions from Labour and some business leaders that the EU referendum was creating uncertainty and would drive away foreign investors.

UK Trade and Investment says Britain was Europe’s top destination for inward investment in 2013-14, attracting 14 per cent more projects than in the previous year and helping to create more than 60,000 new jobs.

Mr Cameron’s assertion of Britain’s appeal to foreign investors was an attempt to challenge Ed Miliband, Labour leader, who says the Conservative “obsession” with Europe is harming the economy and will cost jobs.

The Tories’ open wounds on Europe were exposed again on Monday in a highly charged Commons debate on the re-adoption of the European arrest warrant.

But Mr Cameron made no apology for trying to settle the European debate inside his party and country as a whole with a referendum, planned for 2017, if he wins the next election.

“The worst thing for us to do as a country is to pretend that this European debate is not happening,” he said. “The best thing is to get out there and make the arguments.”

The prime minister added: “Simply standing here and saying, “I will stay in Europe, I will stick with whatever we have, come what may” is not a plan. It is not a strategy, it will not work.”

CBI director-general John Cridland said he welcomed David Cameron’s “endorsement” of the business group’s “In with Reform” European strategy but has expressed concerns that the referendum opens up a significant risk to business.

Leading business figures wrote to the Financial Times on Monday to support Mr Cameron’s EU reform agenda but warned that any cap on immigration would be damaging to the UK and “could threaten our membership of the EU”.

The letter, signed in a personal capacity by figures including Carolyn McCall, chief executive of easyJet, Sir Martin Sorrell, chief executive of WPP, and Juergen Maier, UK chief executive of Siemens, said “the benefits of migration clearly outweigh the negatives”.

Mr Cameron has promised to curb abuses of Britain’s benefit system by migrants but ministers and government officials have suggested that he might try to go further and seek an amendment of the EU’s rules on free movement.

Sir Mike Rake, CBI president and another signatory of the FT letter, told the conference: “Immigration has been, and is, part of the solution to the skills shortages faced by the UK but it is clear that there is a disconnect between the experiences of businesses and the public at large.”

Earlier Conservative discomfort over EU migration was revealed when Theresa May, home secretary, said the party’s vow to cut net migration to “tens of thousands” was a “comment”.

Downing Street said later the target was an “ambition” but ministers admit that there is no way they can meet it before next May’s election, notably due to an influx of workers from other EU countries travelling to join Britain’s buoyant labour market.

Liam Fox, the former Tory defence secretary, will say in a speech in Brussels on Tuesday that free movement would make “perfect sense” in a properly functioning European economy but was producing “huge distortions which are likely to produce huge political consequences if they are not addressed”.